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New Study Reports that Retaliation for Whistleblowers Is Up

New Study Reports that Retaliation for Whistleblowers Is Up

SEPTEMBER 19, 2012

An article in the Wall Street Journal Corruption Currents blog reports on a new survey that asked American workers about their experiences after reporting misconduct to their companies. In the latest survey, 22% of whistleblowers reported that they experienced retaliation from their employers, compared to 15% in the 2009 survey. The study is especially relevant since the SEC recently announced its first payout of $50,000 under its whistleblower reward program. That individual stands to receive up to $300,000 once the total amount of the enforcement sanctions against the infringing company are collected.

Whistleblowers in the study who experienced retaliation were less likely to feel engaged in their company than those who did not experience retaliation. Workers who experienced retaliation were also more than twice as likely to be planning on leaving the company within a year.

The study noted, tellingly, that employees who reported misconduct were more than four times as likely to experience retaliation if they had already experienced “pressure to compromise standards in the course of their job” than those whistleblowers who did not experience any pressure themselves before reporting. Having an established compliance program and a culture of compliance within a company will make it much more likely that retaliation will not occur when an employee has observed misconduct and reports it — and costly retaliation lawsuits will be avoided. On the other hand, it is easy to see why retaliation is much more common in companies where employees experience pressure to compromise one’s standards. Whistleblowers at companies that have recently undergone a merger or acquisition are also more than twice as likely to have experienced retaliation — evidence of the relative chaos that a transition can bring. The study recommends implementing “ethics and compliance programs, strong ethical cultures, high standards of accountability” to help prevent retaliation.”

Guidepost Solutions works with companies to help them establish a professional compliance program with trusted communication channels for reporting any misconduct. In the event of real misconduct that a company must address with regulators, a retaliation lawsuit from the whistleblower that reported the misconduct is the last thing that any company would want. Guidepost Solutions can implement a compliance program to help prevent misconduct before it occurs and to handle whistleblowers’ concerns in a professional, above-board manner when they do report an issue.

Julie Myers Wood is chief executive officer for Guidepost Solutions LLC. She focuses on regulatory compliance and investigative work with significant experience as an independent monitor.